Thank you, Mr. Chair, for the opportunity to be here.
Thank you to the committee members for working under these extraordinary circumstances on behalf of Canadians.
My name is Brian Gilroy. I am the president of the Canadian Horticultural Council. I am also an apple grower from Meaford, Ontario.
The Canadian Horticultural Council is an Ottawa-based voluntary, not-for-profit, national association that represents fruit and vegetable growers across Canada. They are involved in the production of over 120 different crops on over 14,237 farms with farm cash receipts of $5.7 billion in 2018.
As you can appreciate, with 120 different types of crops, our industry is very diverse; so too are the challenges we are facing in light of the COVID-19 pandemic. Certain subsectors in the fresh fruit and vegetable industry, such as potatoes and greenhouse vegetables, are facing very acute and immediate challenges while others are making decisions on the future of their business. What is common among all commodities is that the impacts felt this year as a result of COVID-19 will have a lasting impact on their operations
I want to start off by saying that CHC recognizes that the safety of Canadians and the integrity of our health care system remain the government’s number one priority. We're fully supportive of that. We appreciate the great efforts that the government has made to keep us all safe, as well as the measures to keep our country and economy afloat during this crisis.
However, we are here today to point out that, like most countries, Canada faces serious challenges on an issue that is essential to a strong health care system and a healthy population. It's our national food security. We think this is an opportunity for the Government of Canada to continue to demonstrate how critically important our food security and supply is to Canada and to underline that governments have farmers' backs, to paraphrase the Prime Minister.
Early in the pandemic, access to temporary foreign workers was the single most significant threat to our sector. We are grateful to the federal government for its actions exempting international farm workers from travel restrictions and for providing some financial support to employers of foreign workers to help cover the extraordinary costs of the two-week isolation protocol; however, a number of obstacles have made the flow of critical workers untenable. Many farms will receive merely a portion of the workers they generally rely on.
Again, we do recognize the work that ESDC and IRCC, along with Agriculture and Agri-Food Canada, have put in to getting workers into Canada. We appreciate that, but the government has been using statistics in their briefings that do not reflect the situation on the ground. For example, the government has pointed out that in the month of April, Canada received 10,066 workers compared to 13,000 in April 2019; however, that 10,066 includes workers who were supposed to arrive in March but were delayed when the travel restrictions were put in place.
Based on the numbers we have found internally, the data that we have compiled show that, so far, Ontario, which also coordinates arrivals for the Atlantic provinces, has received 78% of the requested workers; Quebec has received just 50%, and B.C. has received 54%.
May and June are busy months for our growers. That's when they would typically be expecting a lot of their workers to arrive. We are very concerned with the small numbers of workers we are seeing who are fully processed to arrive. Without the guarantee of a reliable workforce, many growers are making decisions as to whether it’s practical, let alone possible, to tend crops, prune trees, harvest greenhouse vegetables, etc.
Compounding these difficult decisions is the knowledge that they do not have a sufficient safety net behind them. Growing fruit and vegetables has significant input and overhead costs. It is not for the faint of heart. Many growers just can’t take on those extra costs without a guarantee that the risk will not push them into bankruptcy.
COVID-19 has also had a significant impact on potato growers in Canada. The closure of food services triggered the collapse in the demand for frozen processed potato products, resulting in a huge on-farm surplus of processing potatoes from the 2019 crop that will no longer be utilized. In addition, the 2020 processing-potato contract volumes have been reduced by 15% to 25%, and unsold seed potato inventories remain on farms as a result of the significant reduction in 2020 plantings. Over 700 million pounds of surplus processing and seed potatoes remain in storage on Canadian potato farms, valued at around $110 million.
The United Potato Growers of Canada will be speaking a little later. They've asked the Minister of Agriculture for immediate action to compensate for losses from the surplus perishable potatoes that cannot be sold due to COVID-19.
Growers are not immune to risk and uncertainty. Year after year, they take on risks associated with Mother Nature, pests, infestations and market volatility to make sure that Canadians have an abundance of healthy fruits and vegetables. With the record cold temperatures over the past fortnight, Mother Nature has been especially—I wrote “difficult”—cruel so far this season. In these extraordinary times more than ever, growers need concrete assurances that the government will have their backs.
The government has announced several measures, such as the emergency wage subsidy and the emergency business account. Unfortunately, many family farms will not meet the eligibility criteria. The $5 billion going to Farm Credit Canada is not beneficial, as taking on additional debt will not help our growers recover our backstop losses.
We understand that business risk management programs are there with the intention of protecting farmers from disastrous losses, but cuts to program funding and changes to the eligibility criteria have rendered the programs, namely AgriStability, ineffective for most farmers. The changes made in 2013 to the reference margin limits and the limitations of what expenses can be deemed eligible make it very difficult for even very devastating scenarios to trigger a payment.
CHC—together with AGgrowth Coalition members which represent various sectors across the agriculture industry—has outlined its recommendations to the Minister of Agriculture and the Minister of Finance for immediate changes to these business risk management programs. These are needed to help see farmers through this crisis so that they know that Canada supports those who grow Canada's food.
We have requested that the AgriStability trigger be increased to 90%, beginning for the 2020 program year or, more generally, the program year that covers the 2020 crop year for edible horticultural farms, and that the program cover 85% of losses below this trigger. To cover any immediate extraordinary costs for growers, we have also requested an immediate injection of a minimum of 5% of a producer's 2018 allowable net sales into their AgriInvest account, and waiving the requirement for the grower to match the contribution. This would help give confidence to growers in the short term.
We have recommended that these emergency coverage measures be coupled with the review of the reference margin limit. It's outdated. If a farm is forced to reduce farmed acreage and/or reduce output per acre as a result of delayed or insufficient labour or value chain supply disruptions, CHC has stated that particular consideration should be given to waiving structural change provisions for edible horticultural farms.
The Canadian Horticultural Council is prepared to work with Agriculture and Agri-Food Canada to refine any of these recommendations and minimize the risk of any unintended consequences or moral hazard. What is important to note is that we are not asking the government for a blank cheque. Making improvements to a program like AgriStability will allow for a mechanism for farmers to recoup at least some of what has been lost.
Again, I'd like to thank you for the opportunity to speak to all of you today. I look forward to any questions you may have.
I will now turn it over to my colleague Jan VanderHout.